MSP cuts promised
Wayne Moore - Feb 21, 2017 - BC Biz

Photo: BC Government

UPDATE (2:30 p.m.): B.C.’s finance minister tabled what he said is the province’s fifth consecutive balanced budget in the legislature Tuesday afternoon.

And, if given the mandate, he said the three-year fiscal plan would provide seven straight balanced budgets.

As promised in last week’s throne speech, the government has opened the purse strings with new funding promised for classrooms, mental health services and other services for families and children.

At the top of the list, a 50 per cent reduction in MSP premiums for households with an annual net income of up to $120,000. The reduction will take effect Jan. 1, 2018.

The government says the reductions mean two million residents will pay no MSP premiums, while another two million will see premiums cut in half.

The province says the cuts will cost $953 million.

“Budget 2017 represents this government’s fifth-consecutive balanced budget, showing the benefits of a fiscal plan that includes steady, solid growth and managed spending,” said de Jong in introducing the budget.

“There’s additional funding for the programs people rely upon and almost $1 billion left in the pockets of British Columbians to let them make the choices that are important to them.”

The pre-election budget includes an additional $740 million for education, $4.2 billion in health care and $796 million for families, individuals and children most in need. Each is funded over the next three years.

The province has also committed $920 million to help in the creation of more than 5,300 affordable housing units, and is raising the threshold for the first-time homebuyers’ program to $500,000.

On the business side, the small business corporate income tax rate is being cut from 2.5 per cent to two per cent and PST on electricity will be eliminated over the coming two years.

The government also pledged $13.7 billion over the next three years in new and upgraded infrastructure.

De Jong said the province is forecasting modest surpluses in each year of the three-year fiscal plan. He said by the end of the three-year plan, the direct operating debt, forecast at $1.1 billion, will be 90 per cent lower than in 2013.

De Jong adds there is an opportunity for the province to be free of operating debt by 2020-2021.

The government is forecasting economic growth between two and 2.1 per cent over the next three years.

However, he says those forecasts could change.

“Downside risks to B.C.’s economic outlook include uncertainty in U.S. fiscal and trade policy, ongoing fragility in Europe, slower-than-anticipated economic activity in Asia, exchange rate uncertainty, and the potential for a slowdown in domestic and Canadian economic activity.”

The three-year surplus is expected to hit about $760 million.

This is the Liberal government’s final budget before the province goes to the polls to elect a new government May 9.

Premier Christy Clark will speak about the budget at a Kelowna Chamber of Commerce luncheon Friday.

ORIGINAL STROY:

The Liberal government is set to bring down its final budget this afternoon before voters head to the polls May 9.

Finance Minister Mike de Jong is expected to rise in the legislature at about 1:45 p.m. to deliver what he stated would be the province’s fifth consecutive balanced budget.

The budget is expected to include several spending increases after the government stated in last week’s throne speech it’s time to pay British Columbians back.

“After years of sacrifice by all of us in British Columbia through challenging times, working together with a plan, your government is now in a position to pay you back, to relieve some financial burdens, and to invest in your household,” it says.

The Canadian Taxpayers Federation has been lobbying for several tax initiatives, including elimination of the Medical Services Premium and significant tax relief.

The provincial surplus has been estimated at $2.2 billion.


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